Pros and Cons of Self Employment

A question I hear a lot is whether or not I plan on ever becoming self-employed. This is something that I think about often as well. I made over $6,000 in extra income in the month of January of 2013, so it’s hard not to think about self employment.

Plus, I’m starting to run out of time. Working a full-time job as an analyst in the financial services industry and also doing all of my side hustles including keeping up with my blog, takes up a lot of my time.

I’m still not entirely positive that self employment is for me. There are many positives and negatives of being self employed, and there are also many positives and negatives of working for someone else. Today, we will talk about the positives and negatives of self employment.

I think whether you will be comfortable being self employed is different with each individual person. Someone who needs someone constantly there telling them what to do might not be a good fit for self employment. Also, a person who is bursting at the seams with creativity or has the passion to be self employed, is probably not meant to work for someone else.

Positives of being self-employed:

1. You’re working for yourself.

This is the number one positive for me. You can do what you want and it can all be based on your own schedule. Everything can be done your way. I’m going to guess that if you are going the self-employed route, then you at least somewhat enjoy what you’re doing as well. I really, really enjoy all of my side hustles, and they truly make me happy. It’s like I’m not even working since I do enjoy it so much.

You also get to watch your company grow and see where it goes. Everything that you do affects the company, which can be a great feeling. You’re doing something exciting with your life and every move you make has an impact on your overall company.

2. Scheduling freedom.

Depending on what exactly you do for self employment, you can have scheduling freedom. You’re not a morning person? Well, then work at night. Yes, yes, I do know that if the majority of your customers are awake only in the morning, then you will probably just be forced into being a morning person though.

If you can do the majority of your work on a computer, then travel while you work! You can do whatever you would like. Make your self employment position work around YOUR family and YOUR life, and not the other way around. Have fun with what you do.

3. Lower or no costs of commuting.

If you are able to work from home, then your commuting costs have significantly decreased most likely as well. You are also saving all of that extra time by not having to drive to and from work everyday. No more stress from having to sit in traffic for you!

Negatives of being self-employed:

1. You might get overworked.

When you’re working for yourself, it’s harder to have a good work-life balance. You are almost always bringing work home (especially if your work is at home), and it might be hard to take yourself away from your business. It almost becomes an addiction because you want to see your business go places.

2. You don’t know when you’ll get paid next.

This might not mean much if you’re already commission at your job, but if you make a salary, you might miss that regular and stable paycheck. You will most likely have to actively look for new clients and the amount of money you make may vary from month to month.

3. No benefits.

At your current job, you may get health insurance, a fitness center, discounts on various products and so on. However, if you work for yourself, then you most likely won’t qualify for these items. Luckily, my fiancé would be able to add me on to his plans, but not everyone is this lucky.

Do you want to be self-employed? Why or why not?

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Michelle

Michelle is the founder of Making Sense of Cents, a personal finance and lifestyle blog about budgeting, traveling, life, and student loans. Read further on her story and life, and you can also connect with her on twitter.

11 responses to Pros and Cons of Self Employment

Great article. With increased broadband penetration, working from home or being self employed is becoming much more feasible. Skype, Google Voice, e-mail, IM, means being at an office is an antiquated notion. Hence the rise of the freelancer.

I love being my own boss but when I started I really hated working alone, it required so much more drive than when I was working in a company. I now have a few employees and a small office and the change is nice!

Working with many clients who are self-employed or on the brink of becoming the same, I find that many people don’t really understand what it means beyond “being my own boss”. Here are a few other points I like to bring up to people:

Pros – generally pay less in taxes, all the upside is yours, you are in control of your destiny and your “job security”

Cons – you often only get paid when you work so there’s rarely vacation pay, you need to understand every aspect of the business and “wear many hats”, liability risk

It’s certainly not for everyone but those who can be dedicated, self-motivated, and be successful at it, it’s hard to beat working for someone else.

Self employment gives you more freedom. Especially if you work from home, you can spend more time with your family and have fun while you’re working. No more stress, I believe that’s what everybody dreams of !

I think the best strategy is to not throw all your eggs in one basket. I started off in the construction field and have diversified into other types of income sources. Landscaping, Snow removal, online income and even selling old tools on Craigslist/Ebay. I think there are so many chances to find this income now that it is best to diversify to avoid any problems worrying about having cashflow.

As a personal trainer, I think the pros far outweigh the cons. I think the biggest problem that many people have it getting off the ground from the start. One thing I was able to do, which might vary from niche to niche, is to acquire clients on the side while I worked at my regular job. As a gym manager I was able to get contacts over the years and eventually when I ventured out on my own I was able to let these people know about it.

I think whatever field you are in, it is best to establish a good relationship with clients as these are often ones that will seek you out when you are self employed.

It seems like everyone wants to be self-employed, even if they don’t exactly what it is they want to do. The “no boss” thing sounds tempting I’m sure, but it’s not always the carefree life people expect it to be.

I think being self employed is something that is truly the American dream, but it comes with a price. As an owner of several sunglass kiosks, I have to constantly worry about inventory control, theft and problems with my employees. These are things that very view people think about, but play a major role in your business. One shady employee that can cost you thousands of dollars if they are not kept in check.

As a personal trainer, I think the pros far outweigh the cons. I think the biggest problem that many people have it getting off the ground from the start. One thing I was able to do, which might vary from niche to niche, is to acquire clients on the side while I worked at my regular job. As a gym manager I was able to get contacts over the years and eventually when I ventured out on my own I was able to let these people know about it.

I think whatever field you are in, it is best to establish a good relationship with clients as these are often ones that will seek you out when you are self employed.